Wealth in France: HNW Investors 2017

"Wealth in France: HNW Investors 2017" analyzes the French investment market, with a focus on the HNW segment. The report is based on our proprietary datasets.

Almost a third of French HNW investors have generated their wealth through being a first-generation entrepreneur. Inheritance ranks second as a source of wealth, and 46% of French investors attribute their fortune to the property and financial services sectors, reflective of market demand and stability. When opting to have wealth managed by a professional, French HNW clients are mostly driven by a lack of time and expertise. However, clients who self-direct their portfolios show a strong reluctance to relinquish complete control. Equities are the preferred asset class, followed by property and bonds. Demand is quite pronounced for tax advice, but financial planning services demand is forecast to grow at a faster pace.

Specifically the report -- Sizes the affluent market (both by number of individuals and their demographics) using our proprietary datasets.- Analyzes which asset classes are favored by French investors and how their preferences impact the growth of the total savings and investments market.- Examines HNW clients attitudes towards non-liquid investments such as property and commodities.

Scope

- Equities and property make up the majority of French HNW portfolios. However, demand for alternative investments is expected to increase rapidly over the next year, while bonds have a significantly weaker outlook.- Frances HNW individuals are most likely to choose discretionary mandates. However, despite a strong preference for professional management nearly 30% opt for execution-only mandates, which is in stark contrast to the regional average.- Over 7% of French HNW individuals are expats, and most of them come from neighboring countries such as the UK and Belgium.

Reasons to buy

- Benchmark your share of the French wealth market against the current market size.- Forecast your future growth prospects using our projections for the market to 2020.- Identify your most promising client segment by analyzing penetration of affluent individuals in France.- Evaluate your HNW proposition by understanding how the French tax system will impact HNW clients.

Table of Contents1. EXECUTIVE SUMMARY 31.1. French clients accumulate wealth through business ventures and inheritance 31.2. Key findings 31.3. Critical success factors 32. PROFILING THE FRENCH HNW INVESTOR 102.1. Entrepreneurship and inheritance account for the largest sources of wealth 102.1.1. The bulk of French HNW individuals are males over 50 years old 102.1.2. Sources of wealth accumulation for French HNW investors are diverse 112.1.3. Many HNW investors have built their fortunes through property and real estate 122.1.4. Nearly half of HNW individuals in France are CEOs and directors 142.2. Expats account for over 7% of the local HNW population 142.2.1. Exceptional Economic Contribution residence permit facilitates business ventures 152.2.2. Nearly 80% of HNW expats are from Western Europe 162.2.3. Alexander Peter Wealth Management leads with expat services 163. FRENCH HNW INVESTMENT STYLE PREFERENCES 183.1. Wealth managers should highlight the time-saving benefits of their services 183.1.1. Over half of Frances HNW wealth is held in discretionary mandates 183.1.2. A lack of time and expertise drives demand for professional advice 193.1.3. Frances HNW investors place just over half of their managed wealth with their main wealth manager 203.2. French HNW investors lack of time is increasing demand for execution-only mandates 213.2.1. Demand is strongest for advisory mandates 213.2.2. Advisory mandates will remain the favored asset management service 223.2.3. A strong reluctance to give up control is driving demand for advisory mandates 233.2.4. French HNW investors who self-direct want exclusive control over some of their portfolio 244. UNDERSTANDING ASSET ALLOCATION TRENDS AMONG FRENCH HNW INDIVIDUALS 264.1. Alternatives will register the fastest increase over the next year 264.1.1. Equities continue to make up the largest segment of HNW portfolios 264.1.2. Equity investments constitute the largest proportion of the average French HNW portfolio 274.1.3. Asset diversification is the main driver for equities investments 284.1.4. Bond investments are lower in France than in the rest of Europe 294.1.5. Wealth managers expect bond holdings to decrease strongly 304.1.6. Cash and near-cash allocations are above the global average 314.1.7. Clients cite risk-aversion and future investment opportunities as drivers for allocations into deposits 324.1.8. Property constitutes a quarter of the typical HNW portfolio 334.1.9. Risk aversion is the main driver for property investments 344.1.10. Alternatives constitute a meagre percentage of the typical HNW portfolio 354.1.11. Asset diversification is the leading driver for investments in alternatives 364.1.12. Commodities allocations are as low as the European average 374.1.13. Asset diversification is the leading driver of commodity investments 385. HNW PRODUCT AND SERVICE DEMAND 405.1. Wealth managers should lead with tax planning services 405.1.1. High taxation rates drive demand for planning services 405.1.2. Allen & Overy partners with advisors to increase their competitive advantage 415.1.3. Demand for all planning services is forecast to increase 425.1.4. Primonial grows its AUM by offering a multi-service proposition 436. APPENDIX 456.1. Abbreviations and acronyms 456.2. Definitions 456.2.1. Affluent 456.2.2. HNW 456.2.3. Liquid assets 456.2.4. Mass affluent 456.3. Methodology 466.3.1. GlobalDatas 2016 Global Wealth Managers Survey 466.3.2. GlobalDatas 2015 Global Wealth Managers Survey 466.3.3. Global Datas WealthInsight 466.3.4. Exchange rates 466.4. Bibliography 476.5. Further reading 48

List of FiguresFigure 1: The bulk of HNW investors in France are males over the age of 50 11Figure 2: First-generation entrepreneurship is the main source of wealth for Frances HNW investors 12Figure 3: Property and real estate is the leading generator of French wealth 13Figure 4: A quarter of HNW investors in France are CEOs 14Figure 5: 7.2% of Frances HNW client base is made up of expats 15Figure 6: Nearly 40% of Francess HNW expats are from the UK 16Figure 7: Alexander Peter Wealth Management targets British expats 17Figure 8: Over half of HNW assets are managed using discretionary mandates 19Figure 9: A lack of time is the major driver of demand for wealth management services in France 20Figure 10: The vast majority of Frances HNW investors use two or more advisors 21Figure 11: HNW demand is particularly high for advisory services 22Figure 12: Advisory asset management will experience the highest increase in demand 23Figure 13: HNW investors in France are reluctant to relinquish control 24Figure 14: Advisors should build strong relationships with their clients to offset self-directing trends 25Figure 15: The average French HNW portfolio is relatively balanced 27Figure 16: The majority of equity investments are held in funds 28Figure 17: Equities growth will be driven by asset diversification and dividend income opportunities 29Figure 18: Bonds are the third most important investment vehicle 30Figure 19: Bond investments are forecast to decrease across the continent 31Figure 20: Cash and near-cash allocations are higher in France than the rest of Europe 32Figure 21: Risk aversion will drive cash and near-cash investment growth 33Figure 22: Property funds are significantly more popular than direct investments 34Figure 23: Property investments are forecast to increase further 35Figure 24: Private equity funds are the most popular alternatives investment 36Figure 25: The majority of industry experts expect alternative investments to increase 37Figure 26: French HNW investors prefer to hold commodities directly 38Figure 27: Asset diversification drives French HNW investment in commodities 39Figure 28: Tax planning is the priority for Frances HNW investors 41Figure 29: Allen & Overy advises wealth managers on tax matters 42Figure 30: Financial planning will experience the highest increase in demand 43Figure 31: Primonial offers a wide range of wealth management services 44